Asked by Gihanthi De Silva on Sep 28, 2024

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All of the following are necessary to calculate the customer lifetime value EXCEPT ________.

A) customer level operating profit per year
B) length of customer relationship
C) economies of scale
D) discount rate

Customer Level Operating Profit

Customer Level Operating Profit refers to the profit earned from a customer, after deducting operating expenses directly associated with serving that customer.

Length of Customer Relationship

The duration over which a business maintains a relationship with an individual customer, significant for understanding customer loyalty and value.

Economies of Scale

Economies of scale are cost advantages that businesses obtain due to scale of operation, with costs per unit of output decreasing with increasing scale.

  • Comprehend the principle of customer lifetime value (CLV) and the method of its computation.
  • Identify key components necessary for calculating customer lifetime value.
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JB
Jared Burroughs1 day ago
Final Answer :
C
Explanation :
Economies of scale are not necessary to calculate customer lifetime value. However, customer level operating profit per year, length of customer relationship, and discount rate are all required factors in the calculation.